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Employment rises overall, while long-term unemployed still suffer

Employment figures improved between June and September, according to statistics released by the Office of National Statistics (ONS) on Wednesday.

Figures showed that employment rose by 0.2% after June, which demonstrated a 1% rise year-on-year.

The number of people in work over 16-years old increased by 518,000 from this time last year, and by 100,000 on the period between April and June 2012.

Although these figures are positive, and employment is improving in the UK, think tank IPPR warned that the amount of people in long-term unemployment is still a critical issue.

A report written by think tank IPPR and Sweden’s former Financial Minister, Pär Nuder, highlighted that long-term unemployment rose by 13,000 in the last quarter, to bring the total up to 897,000 people.

Mr Nuder’s report advised the UK to follow the example of Sweden’s response to their economic crisis in the 1990s, by investing in education and employment programmes to support those who have been out of work for long periods of time.

Kayte Lawton, Senior Research Fellow for IPPR, commented on the ex-ministers suggestions: “Sweden was hit by a major financial crisis in the early 1990s, which pushed the deficit up to 10 per cent of GDP, the highest in the OECD, while unemployment tripled.

“But between 1994 and 1998 the Social Democratic government turned a large deficit into a surplus while investing heavily in programmes to tackle unemployment.

“These policies improved the skills base of Swedish workers with an eye to the long-term and gave unemployed people a chance to gain real, paid experience and a recent reference. The UK can learn a lot from the Swedish experience.”

The think tank recommended an extension to the Government’s Youth Contract to everyone who has been unemployed for over a year, to guarantee minimum wage jobs.

Benefits, however, would be cut to people who refused to take on jobs offered to them through this scheme.

Tony Dolphin, Chief Economist for IPPR, welcomed the labour figures announced on Wednesday morning, but remained cautious of celebrating too early.

He said: “Employment is up and unemployment down over the last quarter. Youth unemployment also fell and is now well below the one million mark.

“The UK economy may have just been through a double-dip recession, but the labour market has performed remarkably well this year.

“One unwelcome note in the unemployment numbers was the 12,000 increase in the numbers of the long-term unemployed over the last three months.

“Although this is a smaller rise than recorded in recent months, and there are good reasons to expect long-term unemployment to stop rising in coming months, there are now almost 900,000 people in the UK who have been out of work for more than a year. This is an area where more government action is needed.”

ONS figures showed that pay, including bonuses, rose by 1.8% between July and September compared with the same period in 2011, while regular pay rose 1.9%.

Mr Dolphin added: “One reason that employment has increased despite weak output growth is that workers have accepted a cut in their real pay. Average earnings are still increasing by less than 2 per cent, and – as we saw yesterday – inflation has increased to 2.7 per cent.”

Neil Carberry, CBI Director for Employment and Skills, said: “It’s encouraging that people are continuing to find jobs and that the unemployment rate is falling. But progress on getting people into work is much slower than we saw earlier in the year, and last month there was a troubling rise in the number of people claiming Jobseeker’s Allowance.

“Youth unemployment remains a concern despite the recent fall in overall numbers. Our focus should be on helping young people build the skills and aptitudes needed to get on in life and work.”

UC General Secretary Brendan Barber added: “Today’s figures show more welcome improvements in the jobs market with employment rising and the number of young people not in education or work falling.

“However, tougher times may still be ahead if our economy starts to slow again in the autumn quarter. There are still big challenges ahead, with long-term unemployment rising, real wages falling and far too many young people out of work.

“Today’s improvements can only be sustained if the government acts to keep our economy moving. We also need far more investment in quality support for those who are out of work to ensure that they can share in our emerging jobs recovery.”

This was posted in Bdaily's Members' News section by Miranda Dobson .